SR-091107-1Ec;tYar City Council Report
Santa Dlonica
City Council Meeting: September 11, 2007
Agenda Item:
To: Mayor and City Council
From: Karen Bancroft, Human Resources Director
Subject: Resolution Authorizing the City Manager to Execute a Memorandum of
Understanding Setting the Terms and Conditions of Medical Insurance
Coverage with Management Team Associations, Supervisory Team
Associates, Administrative Team Associates, Municipal Employees
Association, Public Attorneys Union, Public Attorneys' Legal Support Staff
Union, United Transportation Union (Local 1785), Executive Pay Plan
Participants and the Santa Monica Firefighters, Local 1109 (IAFF) and
Appropriation of Budget Changes.
Recommended Action
This report requests that Council adopt the attached Resolution authorizing the City
Manager to execute a Memorandum of Understanding (MOU) establishing the terms
and conditions of medical insurance coverage with the City's miscellaneous employee
(non-safety) bargaining units, the participants of the Executive Pay Plan and the Santa
Monica Firefighters, Local 1109 (IAFF). This report also requests approval of an
appropriation for FY2006-2007 budget savings.
Executive Summary
The current Memorandum of Understanding (MOU) was not set to expire until
December 31, 2007. In order to get the MOU in sync with the City's annual budget
process, the bargaining and employee groups covered by this MOU agreed to reopen
the MOU early, resulting in a new 3-year contract that has been ratified by the covered
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bargaining and employee groups. The total cost of the MOU is $14,051,085 for fiscal
year 2007-2008 and is included in the adopted budget.
Discussion
The new MOU will be in effect from FY2007-2008 until the end of FY2009-2010. The
medical insurance premium rates are set by the medical insurance providers on a
medical plan (calendar year) basis. As a result, the cap on the City's contribution
towards the cost of medical insurance coverage will change at mid-year (January 1ST) of
each fiscal year covered by this contract. Each January 1ST of the term covered by this
MOU, the City's contribution cap will be increased by 12%. The 12% increase in the
City's contribution cap is based on projected medical insurance premium increases over
the next 5 years. For the first half of FY2007-08, the City's contribution towards the cost
of medical insurance coverage will be capped at $668/month per covered employee.
For the second half of FY2007-08 and the first half of FY2008-09, the City's contribution
will be capped at $748/month. For the second half of FY2008-09 and the first half of
FY2009-2010, the City's contribution will be capped at $838/month. For the second half
of FY2009-2010, the City's contribution will be capped at $939/month.
The MOU also provides for City contributions into medical trusts that are to be used to
reimburse all or part of the health insurance premiums for eligible retirees and
dependents. During the term of the MOU, the City will continue to contribute
$142/month on behalf of each eligible active non-sworn employee into a medical trust
established and administered by the non-sworn employees. The City will also continue
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to contribute $142/month on behalf of each eligible active employee represented by
Local 1109 (Firefighters) into a medical trust established and administered by Local
1109. In addition, the City will make aone-time lump sum contribution of $900,000 into
the medical trust administered by non-sworn employees and aone-time lump sum
contribution of $100,000 into the medical trust administered by Local 1109.
Budget/Financial Impact
Assuming there are no changes in the number and the current enrollment of active City
employees, the total cost of the new contract terms for FY2007-2008 is $14,051,085.
Provision was made in the FY2007-2008 budget for the City's contributions towards
medical insurance premiums and the monthly contributions into the medical trusts. The
one-time lump sum payments will need to be appropriated from FY2006-2007 budget
savings. No additional appropriation or budget action will be necessary.
Prepared by:
Karen Bancroft, Director of Human Resources
Forwarded to Council:
H
Kai-enBancroft ~ '~-~ Lamont Ewell
Director, Human Resou s ity Manager
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Reference
Resolution No.
10241 (CCS)